After a big miss on the Powell/Brainard nominations in November, the price analysis has been fairly accurate. Identifying the initial breakout above $1800, mentioning that $1900 was fragile support, and last month concluding that gold had found a bottom around $1800.
For the past month, gold has been consolidating within a tight range around $1850. The data suggests the next move is most likely up. Lots of indicators have bottomed, which leaves little downside remaining. The market has also priced in an extremely aggressive Fed and held up very well over that time.
This analysis focuses on gold and silver physical delivery on the Comex. See the article What is the Comex for more detail.
The Comex has signaled weakness in the silver market but has been some activity bubbling under the surface. What’s really going on with silver?
They tried to deny it for months, but now everybody knows we have an inflation problem. The president, Congress and all of the central bankers at the Fed are trying to find ways to solve this problem. But as host Mike Maharrey explains in this episode of the Friday Gold Wrap, all of their solutions are the equivalent of dumping buckets of water on a drowning man.
Outflows of gold from Comex vaults have accelerated. Meanwhile, there is some shuffling of inventories of silver.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
The Federal Reserve just gave us the biggest interest rate hike since 1994. A month ago, we were told a 75 basis-point hike wasn’t on the table. It almost seems like the central bankers are winging it. Or as Friday Gold Wrap podcast host Mike Maharrey puts it, it’s like they’re playing darts while wearing blindfolds. In this episode, Mike breaks down the rhetoric coming out of this Fed meeting and speculates on what might be next.
The latest seasonally adjusted inflation rate for May came in scorching hot at 0.98% MoM and 8.62% YoY, beating expectations of 0.7% and 8.3% respectively. All prices rose in May with 9 of 11 categories rising faster than the 12-month trend, representing 97.5% of the total CPI.
The Consumer Price Index (CPI) data for May came out this morning. The projection was for another hot headline number but some relief in core CPI. This would seem to indicate we’ve passed peak inflation. In this episode of the Friday Gold Wrap podcast, host Mike Maharey explains why “good news” in the CPI data would be bad news for inflation. Then he reacts to the data in real-time. (Hint — it wasn’t good news.)
The April trade deficit came in at -$87B. This was the first time in 5 months that a new record had not been set (pink dot below). The Net Goods Deficit remained below -$100B for the fifth straight month. This Trade Deficit comes on the heels of an absolutely massive -$108B Deficit in March. It’s likely that some of the April deficit was counted in March, so expect a rebound in the May number.
The Treasury increased the total debt by $125B in May after a brief drop in April. This brings the total debt increase so far in 2022 to $880B. More importantly, though, the cost to service the debt is exploding. Total annualized interest has increased by $40B or 13.5% since the start of the year!